The three-dimensional printing company announced that it would price a public offering of 5.95 million shares of common stock in order to raise an additional $317 million. The company also granted underwriter Canaccord Genuity the option to buy an additional 892,500 shares of common stock for 30 days.
3D Systems had 103.9 million shares outstanding. Existing shareholders would be diluted about 5.8% and as much as 6.5% if Canaccord exercises its option. Shares fell far more than the dilution amount by midday, however. They were down 10.4% by 1p.m.
The price action led some investors on StockTwits.com to argue that management picked a poor time to raise additional capital with a share offering. 3D shares are down more than 41% from an all-time-high of $97.28 hit in January, indicating that shareholders already doubt the company's ability to return value and make the right kind of investments.
$DDD what a terrible management.? Mick (@MickeTrader) May. 28 at 11:36 AM
$DDD they should of done this secondary at 90 to get more money lol smh on management? Kay (@HookEM) May. 28 at 09:49 AM
Moreover, 3D is facing more competition in the three-dimensional printing arena that will make justifying its 42X price to 2015 earnings multiple more difficult. Hewlett-Packard (HP) management has promised that it will have a 3D product by the end of the fiscal year on Oct. 31.